Encana Corporation (NYSE:ECA) (TSE:ECA) agreed to sell its Bighorn assets to Jupiter Resources, a portfolio investment fund managed by the affiliates of Apollo Global Management LLC (NYSE:APO) for $1.8 billion.
Encana Corporation (NYSE:ECA) (TSE:ECA) said the sale of the Bighorn assets includes 360,000 net acres of land along with its working interests in all pipelines, facilities and service arrangements.
According to the company, the total net proved reserves of the Bighorn assets were approximately 1,100 billion cubic feet equivalent (Bcfe) by the end of 2013. Approximately three quarters of those reserves are natural gas.
The transaction is expected to be completed by the end of the third quarter this year subject to customary closing conditions and regulatory approvals. RBC Capital Markets served as financial advisor, and Burnet, Duckworth & Palmer LLP as legal advisor to Encana Corporation (NYSE:ECA) (TSE:ECA) in the deal.
Sale of Bighorn assets advances Encana strategy
In a statement, Doug Suttles, president and CEO of Encana Corporation (NYSE:ECA) (TSE:ECA) said selling the Bighorn assets advances the company’s strategy by unlocking value from its portfolio while focusing on developing its core growth plays and extracting additional value from its assets.
“Bighorn is a high quality asset that has not been receiving significant investment in 2014. Going forward, it should serve as an excellent foundational asset for Jupiter Resources,” said Suttles.
Bighorn is an attractive asset base
Simon Bregazzi, CEO of Jupiter Resources said, “We are very excited about the opportunity to actively develop the Bighorn assets, one of North America’s premier liquids-rich natural gas projects in an area that has generated some of Canada’s most prolific well results in recent years.”
Rakesh Wilson, a Partner of Apollo Global Management LLC (NYSE:APO) said, “We believe Jupiter Resources is acquiring a very attractive asset base in the core of the Deep Basin. We look forward to investing with the Jupiter Resources team as they further develop the vast resources contained within the Bighorn assets.”
Encana Corporation (NYSE:ECA) (TSE:ECA) is one of the leading energy producers in North America. The company is focused on growing its portfolio of diverse resource plays held directly and indirectly by its subsidiaries.